Iran Center of New Rail Transport Route

The newly-proposed corridor is an “economically viable” route for the transportation of 72 million tons of goods shipped from India to Europe and the 25 billion tons carried in the opposite direction every year.

Iran, Azerbaijan, Georgia, Ukraine and Poland have planned the transportation of 200,000 tons of cargo by the end of 2017 via a newly-proposed transit corridor that stretches from India to the Black Sea and Europe.

The announcement was made by Javid Gurbanov, the head of Azerbaijan Railways, the Baku-based Trend News Agency reported on Monday.

The so-called “South-West Transport Corridor” was discussed in a multilateral meeting between the rail authorities of the aforementioned states in Baku on Monday.

“The multimodal route will significantly reduce the time and cost of transportation of goods between India and Europe,” Gubanov said during the meeting, IRNA reported.

According to the official, the path is an “economically viable” route for transportation of 72 million tons of goods shipped from India to Europe and the 25 billion tons in the opposite direction every year.

“Currently, it takes 40 days to transport shipments from India to Europe. The South-West Corridor will reduce this time to 15 days.”

This is the first widely publicized development regarding the new corridor, even though the Trend report says Tehran, Baku, Tbilisi and Kiev had signed an agreement in 2016 to potentially divert up to 10 million tons of the India-Europe trade to the path.

This parallels efforts made by Iran, Azerbaijan and Russia in the past few years to launch a similar rail corridor called International North-South Transport Corridor connecting Northern Europe with Southeast Asia. An Iranian-Azeri rail connection is underway and major rail projects are being built in Iran to complete the mega project. One is being financed by Azerbaijan.

The missing links in Iran include a railroad from Qazvin to Rasht, which Iran says will come on stream soon, in addition to its extension from Rasht to the Caspian port of Astara. Baku has agreed to invest $500 million in this project.

Months ago, Azerbaijan finished a railroad to its border with Iran, as part of a line to connect the city of Astara in Azerbaijan to an Iranian port city with the same name. It included a bridge on Astracay River along the border.

During the Monday meeting, CEO of Islamic Republic of Iran Railways Saeed Mohammadzadeh referred to the so-called Astara-Astara project as examples of “successful cooperation” between Iran and Azerbaijan, adding that the neighboring countries are discussing the launch of the new route on the back of the INSTC experience.

Efforts to develop transport infrastructures in Iran gathered momentum after international sanctions imposed against the country over its nuclear program were lifted in January 2016 as part of a nuclear deal reached months earlier between Tehran and world powers.

With the sanctions lifted, Iran is planning to exploit its capacity in the transportation sector. Considering its strategic location in the region, the country presents itself as a potential transit hub.

“Iran has huge transit potential,” Mamuka Bakhtadze, CEO of Georgian Railways, told IRNA on the sidelines of the Baku meeting.

“In recent years, trade between Iran and Europe has seen a rise and this adds to the importance of the [South-West] corridor,” he added.

The export of Iran’s five main commodities shipped to the European Union saw a significant increase in value in the last Iranian year (ended March 20, 2017), compared with the average annual export value of the same products between the fiscal 2011-12 and 2015-16. The five years precede the implementation of the nuclear deal, also known as Joint Comprehensive Plan of Action.

Hot-rolled non-alloy iron and steel topped the list of Iran’s exports to the EU last year, from which Iran earned around $66 million, registering a 58% rise compared with the average annual export value during the five years preceding the JCPOA.

Non-alloy iron and steel in forms other than ingots followed earned $50 million and marked a rise of 87%.

About $41 million worth of gas condensates were also exported to the EU last year, up 100%. Light oils, petrol excluded ($25 million), and methanol ($16 million) came next, registering a 100% and 28% growth respectively.

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Iran 6,500km of railroads

Iran will construct 6,500 kilometers of railroads in five years, announced the head of International Transportation Office at Iranian Railways.

Hossein Ashouri told Trend News Agency that the figure also includes underdeveloped projects, while the construction of further 3,500 kilometers of railroads after 2022 is currently under study.

He however did not mention the amount of investment required for the projects, but the General Director of Islamic republic of Iranian Railways Saeed Mohammadzadeh said on Monday that in the past four years, Iran invested $1 billion each yuar on railroad projects, and for the next five years the figure would reach $1.5 to $2 billion annually.

Currently, Iran’s railroad network extends for 10,170 kilometers.

One of the railroad projects is the Rasht-Astara segment which extends for 175km. On completion, the North-South Transport Corridor will become fully operational.

The International North-South Transport Corridor is meant to connect Northern Europe with Southeast Asia. It will serve as a link connecting the railways of Azerbaijan, Iran and Russia.

The corridor is planned to transport six million tons of cargo per year in the initial stage and will subsequently rise to 15-20 million tons.

The only remaining section of the project in Iran is the Rasht-Astara segment, which Iran plans to complete within three years through a loan from Azerbaijan. Financial talks on this are continuing and an agreement is in the final stage, Ashouri said.

The Rasht-Astara segment would require an investment of $1.1 billion. Iran and Azerbaijan are negotiating a $500-million loan.

Iran Steel Project – Austria Allocates One Billion Euro Credit Line

Austria says it has allocated a credit line of €1 billion for a major steel production project in southern Iran.

The announcement was made by the visiting Austrian Finance Minister Hans Jörg Schelling during a visit to Tehran.

Schelling was quoted by Iran’s IRNA news agency as telling his Iranian counterpart Ali Tayyebniya that the credit line was meant to help the expansion of relations between the two countries.

IRNA further quoted him as saying that Austria’s banks were eager to promote relations with Iran’s banks.

For his part, Tayyebniya called on the Austria government to do more to help expand economic relations with Iran.

He emphasized that fighting money-laundering – as well as funds with suspicious origins – were central themes in the plans of Iran’s banking system.

Austria’s steel production investment plan in Iran involves the establishment of a plant with a capacity of 2.4 million tons per year in Gol Gohar in Iran’s southern province of Kerman.

To the same effect, Austria’s Voest Alpine has reportedly signed an agreement to team up with Iranian partners to establish a steel production plant in Gol Gohar.

On a separate front, Iran’s Minister of Industry, Mine and Trade Mohammad-Reza Ne’matzadeh told Schelling in a separate meeting that Iran expected Austria to adopt more hostile plans to expand trade relations between the two countries.

Ne’matzadeh emphasized that banking restrictions were the most important barriers that were obstructing the expansion of Iran-Austria relations.

The Iranian official further said companies from Iran and Austria were working over the production of low-consumption motors for automobiles.

He expressed hope that an agreement that the relevant parties had signed over this last year would lead to industrial production by 2020.

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Switzerland to build Iran’s largest solar power plant

Swiss investors will construct Iran’s largest solar power plant in the northeast of the country, announced the managing director of North Khorasan Power Distribution Company.

Alireza Sabouri added that the construction of a 300-MW solar power plant will begin within four months, ana.ir reported.

The Renewable Energy Organization of Iran (SUNA) and a group of investors from Switzerland signed a contract last July to build the solar power plant in North Khorasan Province.

Following agreements with German firms to construct solar plants in Iran, the government decided to also work with Swiss investors who agreed to invest €40 million ($44 million) in Iran’s renewable energy sector.

Based on the contract, the solar plant will be wholly designed, built, installed and launched by the European firms.

Sabouri added that SUNA has provided the foreign companies 60 hectares of land near a 400-kilovolt power station in the city of Jajrom to transfer its output.

Pointing to a directive by the state-run Iran Power Generation, Distribution and Transmission Company on the optimal use of domestic equipment and facilities, the official underlined that with the exception of solar panels and inverters, all other parts and components of the solar project will be built and supplied by Iranian firms.

In line with its policy to promote investment in renewables, the government will purchase electricity from renewable plants at a tariff that is 17 percent above the regular price and will increase the tariff by an additional 30 percent if domestic equipment are used in building the plants.

Iran has a diverse climate of vast windy plains with over 300 sunny days in the year, which makes it ideal for generating electricity from wind and solar energies, but its total output from renewables does not exceed a few hundred megawatts.

To expand renewables infrastructure, Iran has turned to European powerhouse Germany that produces 90,000 MW from renewable — which is higher than Iran’s total power generation capacity of 75,000 MW.

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Int’l business firm to invest € 22 billion on Iran road projects

“The bank facilities, expected to be paid in the form of finance agreements, will go to the projects conceived by the Ministry of Roads and Urban Development,” said Mohammad Taqi Norouzi, VNS Representative on Monday during a meeting with provincial financial and economic officials in this north-western Iranian province.

“The company, based on the finance agreements and memorandums of understanding signed between the VNS and Iran, is expected to invest more than 22 billion euros on road projects across the country,” Norouzi said.

He also encouraged officials in West Azarbaijan Province to exploit the investment capacities in the best way.

Eight billion euros of the bank facilities are expected to go to road projects in West Azarbaijan, Norouzi said.

VNS is a combination of international business companies which provide financial facilities of more than 50 billion euros to help develop infrastructure and construction projects in other countries.

With no highways, West Azarbaijan Province, in north-western Iran, has more than 12,000 kilometers of roads.

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Iranian Steelmakers Bolster Presence in Asian Market

Iran is gradually becoming a major exporter to the Southeast Asian market.

Iran was the fourth fastest growing steel exporter to Thailand last year.

Iran exported 884,800 tons of steel to Thailand in the fiscal 2016-17, accounting for 16% of all Iranian steel shipments and indicating an over 97% growth year-over-year

Iran exported 5.53 million tons of semis and steel products in the last Iranian year (March 2016-17), the Iranian Mines and Mining Industries Development and Renovation Organization reported.

Iranian steelmakers exported over 3.74 million tons of semis and 1.79 million tons of steel products in the fiscal 2016-17, registering a 108% and 16% growth respectively compared to the preceding year, according to Iranian Steel Producers Association.

Thailand, the UAE and Taiwan were the main customers of Iranian steel, accounting for 16%, 12% and 11% of the total exports respectively, statistics released by IMIDRO show.

Italy with 9%, Oman with 7%, China with 7%, Iraq with 6%, Afghanistan with 5%, Jordan with 3%, Turkey with 3%, Egypt with 3%, Brazil with 3%, Spain with 2%, Morocco with 2% and Turkmenistan with 2% followed.

Iran Medical Equipment Exports Up 18%

Iran exported $17 million worth of medical devices during the fiscal 2016-17, registering an 18% increase year-on-year, an official with Iran Trade Promotion Organization said.

Mohammad Reza Modoudi also said Europe is the biggest market for Iranian medical devices, Mehr News Agency reported.

“Currently, Iran has some 500 medical device production units, producing over 800 types of medical devices to supply the domestic as well as foreign markets,” he said.

He called for government support and the active participation of Iranian manufacturers in international exhibitions to increase exports.

The Iranian medical device market is expected to expand by 9.1% compound annual growth rate to 2018, according to Business Monitor International research group.

In 2013, Iran’s medical device market was estimated to be worth $832.5 million.

BMI has also predicted that Iran’s medical device market would reach $1.28 billion in 2018.

Mobile Internet Usage in Iran Grows 42%

The rate of mobile Internet usage has grown 42% over four years, with the latest data putting the number at 33 million subscribers at the end of the previous fiscal that ended in March, an increase of 3.9 million.

Until 2013, only 0.8% of people (about 600,000) used Internet mobile services, prior to the introduction of 3G and 4G mobile services by the two biggest networks, IRNA reported.

Reports by the Ministry of Communications and Information Technology in February, showed the figures for 3G and 4G Internet users stood at a total of 27.1 million lines (34%).

The prevalence of Internet use is not restricted to mobile Internet as fixed-line broadband is becoming popular at an unprecedented pace. Now almost half of Iranian households are connected to the World Wide Web through the service.

According to data released by landline Internet service providers, there are currently 10 million active fixed-line broadband subscribers in the country, a two-fold increase since 2013, when only 5 million subscribers used landlines for Internet.

The surge in Internet use signifies that not only are more people able to access information from around the globe, but they can also use this technology for economic growth, such as creating jobs, and placing advertisements.

However, landline Internet speeds in Iran are still far behind many other countries with the average home Internet speed hovering around 1-2Mbs.

PGPIC, European Firm Partner in Petchem Project

Iran’s Persian Gulf Petrochemical Industries Company (PGPIC) and a European company have partnered to build a major petrochemical project in Iran, PGPIC said.

PGPIC managing director Adel Nejad Salim said the company has struck a €3b agreement with the European company to build a petrochemical facility in Assalouyeh, Iran’s energy hub located in the southern province of Bushehr.

He said the project will produce two polymer chain products for the first time in the country.

The official said PGPIC has signed a memorandum of understanding (MoU) with its European partner in the project.

He said feasibility studies are being carried out about the project and once talks about the plan are complete more details about it will be disclosed.

Nejad Salim further added that his company is considering two other major projects with €1.5b and €2b of investment in Iran with foreign partners.